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Chris Grayling - Work & Pensions Committee

Chris Grayling (Employment Minister), Alan Cave (DWP, Director for Contracted Customer Services) and Chris Hayes (DWP, Labour Market Strategy Director) appeard before the Work & Pensions Committee yesterday in a one-off evidence session to follow up from the report into contracting for the Work Programme in July 2011.  The session aimed to review how the programme is operating in practice, the reasons for and implications of higher than expected total referrals and lower than expected Employment and Support Allowance (ESA) referrals, and how the Work Capability Assessment for ESA is operating, and its interaction with the Work Programme.

The main areas of discussion were as follows (our comments in italics):

ESA:  With regard to the numbers coming through to the Work Programme, CG advised the Committee that the lower than expected ESA referrals were due to WCAs resulting in more people being assigned to the Support Group than expected, and also prognosis times being longer than estimated.  This was unexpected but is an indication that the assessments are not being unduly harsh.

Supply Chain: CG continues to stress that the voluntary sector are heavily involved in Work Programme delivery, with well in excess of 100,000 people on the Work Programme with the voluntary sector.  He stated that this was the largest welfare to work programme ever carried out by the voluntary sector, although it is unclear what the grounds for this comparison are.  CG expects that in the next 6 to 12 months there will be a “shake out” in the Work Programme supply chain as the better performing providers gain more business and under performing subcontractors will have their workload reduced or withdrawn from the supply chain. Before a subcontractor is “dumped all together” the prime must justify this to DWP. 

Data:  CG talked about the chatter there had been about contractual requirments on publication of data.  He again mentioned the ONS and Statistics Authority rules that the Government has to abide by and also highlighted the lag in performance and the difficulty in making the performance information valid.  This issue was overcome in Flexible New Deal by publishing data in cohorts which we imagine is how the WP data will be published.  The intention is to publish early performance data in July 2012 and then more detailed information in the Autumn.  Prime providers will publish a further update in April with regard to job entries they have achieved following on from their recent publication.  The only thing we can think he was referring to the recent ERSA statement.  This is not however conclusive, does not represent the whole industry, and isn't really statistically valid, but it clearly has CG's support.

AC felt that there was going to be no transparency issue with regard to data and that it should be clear what happens below prime contract level.  CG will be encouraging prime contractors to publish lower level information.  

Performance:  When questioned as to whether the non-intervention level of performance would be renegotiated in the future CG advised that this was really for DEL/AME budget negotiations and negotiation with primes for a commitment to performance and he saw no reason to change this in the future as most primes offered performance above this level.

One of the Committee members mentioned Richard Johnson's recent comment that the emphasis on price could lead to “creaming and parking” to enable primes to get as much as possible out of the contract.  CG had a bit of a swipe back at Serco saying that in a public forum when FND was proposed Serco said it wasn’t viable and they wouldn’t bid.  The previous government (dig) adjusted the financial terms as a result.  In a public forum at the launch of the Work Programme when Serco said it wasn’t viable and if they weren’t already involved in welfare to work they wouldn’t bid, CG said “tough” and Serco and everyone else bid for it.  We think CG missed the pertinent bit of that being "if they weren't already involved" but true to form RJ has got them rattled!  

With regard to discounting CG said that there was no correlation between discounting and performance - “some of our most competitive primes are our best performing primes.”  And there was us thinking it was too early to provide valid statistics!

Complaints: So far there have been 11 complaints that have gone through to the Independent Case Examiner.   

Evaluation Framework:  DWP are currently undertaking qualitative work on the experience of participants that will be published with the statistics in the Autumn.  This will apparently show variations in levels and quality of activity coupled with actual performance.

Ex-Offenders:  the price for the day 1 mandated offender cohort is slightly below the hard to help groups as there is an element of dead weight in this group eg some will get into work straight away.  DWP are working with Ministry of Justice to look at more in-depth life based interventions for this group.

Fraud:  There are two investigations around A4e, one being an ESF contract where payments are alleged to have been obtained for short term jobs; the second is into the MWA contract.  DWP have put a full internal audit team into A4e to carry out a detailed trawling of the systems.  If systemic failing is found contracts will be terminated.

Since 2005 there have been 125 allegations of “issues” in welfare to work contracts.  In “almost all of those cases there has been no significant substantive action to be followed”.  In a small number of cases they related to employee malpractice.  The issue comes if systemic fraud goes beyond a rogue employee.  CG didn’t want to put a time limit on the investigation saying that the specific allegations are likely to be dealt with quickly, while the wider investigation may take a few weeks.  If A4e contracts are withdrawn transitional arrangements will come into play and contracts will be retendered in the worst case scenario.

Work Experience: There was much discussion around the recent press coverage and the benefits of work experience to the majority of those taking part.  CG felt that the recent coverage was a, "deliberate attempt to muddy the waters by those opposed to what the Government are trying to do".  He was disappointed by the BBC who should have made more of an effort to get their facts right and annoyed about the upcoming court cases which waste the time of public servants.  CG stated that it is a ludicrous situation that people are saying their human rights are being infringed in these cases.  

All in all there was nothing too controversial or exciting in the meeting, but if you'd like to watch the proceedings yourself visit the Parliament TV site.

20 March 2012


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